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PMO involved in plan to cover up Duffy expenses, lawyer says

Donald Bayne spent nearly an hour alleging how Prime Minister Stephen Harper's staff and key Conservative senators developed a scheme to have Duffy take the fall for wrongdoing that even they agreed he had not committed.

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NDP questions Harper over new details in Mike Duffy case(CP)

By The Canadian Press

Mon., Oct. 21, 2013

Mike Duffy once promised his side of the story on his dealings with the Prime Minister's Office and the $90,000 payment of contested expenses.

On Monday, his lawyer helped break the senator's silence with what he called "the tip of the iceberg" of evidence.

Donald Bayne spent nearly an hour alleging how Prime Minister Stephen Harper's staff and key Conservative senators developed a scheme to have Duffy take the fall for wrongdoing that even they agreed he had not committed.

Harper, meanwhile, continued to lay blame for the matter Monday on a single person — his former chief of staff Nigel Wright.

"The whole political decision-making about this has been a fiasco," Bayne told reporters.

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"From the get-go, rather than letting the truth out, that there are flaws in the Senate system and rules, it's the old story. The cover-up is always more damaging than the original issue."

Donald Bayne, Sen. Mike Duffy's lawyer, said Monday at a news conference that his client was "scapegoated" by the Prime Minister's Office. (Adrian Wyld / THE CANADIAN PRESS)

Senator Mike Duffy (CHRIS WATTIE / REUTERS file photo)

Duffy is facing the threat of suspension without pay from the upper chamber for "gross negligence" in the management of resources, along with colleagues Pamela Wallin and Patrick Brazeau. Conservative motions are expected to be introduced Tuesday.

Bayne said Duffy never submitted any improper expense claims based on a reading of the rules, and that was borne out by an independent audit and in a series of communications that Duffy had with senior Tories. At issue was Duffy's designation of a
house in Prince Edward Island
as his primary residence, and the living expenses he claimed for his home in Ottawa.

The lawyer quoted from a letter sent by former Conservative Senate Leader Marjory LeBreton in January 2009, in which she allegedly tells Duffy that "Senate residency is not defined" anywhere in the rules. LeBreton could not immediately confirm whether she wrote such a letter.

Duffy also allegedly received an email from Wright in December 2012, when stories suggesting Duffy spent little time at his P.E.I residence emerged.

"I am told that you have complied with all the applicable rules and there will be several senators with similar arrangements," Wright allegedly wrote. "This sure seems to be a smear."

By the following April, auditors at Deloitte had also concluded a review of Duffy's living expenses, and said the rules weren't clear on residency.

Yet another Conservative, Senator John Wallace of the ethics committee, also allegedly wrote a memo saying the rules on residency were not clear, and quotes from a Senate handbook on the matter. Wallace's office said Monday he had no comment.

Bayne says Duffy was then told by the Prime Minister's Office that despite his expenses being above board, he would have to repay four year's worth of them to appease Tory voters.

When Duffy objected, Bayne says the Prime Minister's Office threatened to have him lose his seat by having a Senate committee declare his residency situation ineligible.

"So that's the hammer. The threat seems obvious: you take the dive, or this sub-committee will throw you out on the residency issue before you've had any kind of hearing," Bayne said.

Wright's payment of $90,000 to cover Duffy's expenses was never the senator's idea, he added.

"The payment of $90,000 was not the doing of Senator Duffy. It was a political tactic forced on him by the Prime Minister's Office."

When the audit by Deloitte finally came out in early May, the Tory-dominated committee dealing with the matter released an initial report uncritical of Duffy's expense claims.

Bayne also alleges that the prime minister's office effectively coached him not to co-operate fully with the independent auditors, and told him what to say to the media.

Duffy's lawyer did not provide reporters with copies of the emails and memos he read from, saying they would come out in the course of a trial should one occur.

One in particular, from Duffy to a former lawyer, was allegedly copied to Harper's former director of issues management Chris Woodcock. The email outlined an alleged conversation between Duffy and Wright, in which the "scenario" of repayment and Duffy's objections were described. Bayne also said the Prime Minister's Office had a lawyer working on the issue.

RCMP documents filed during the summer quoted Wright's lawyer as saying three others in the Prime Minister's Office were aware of his intention to pay back Duffy's expenses.

During question period on Monday, the opposition seized on the points raised in Bayne's news conference and over the summer in the RCMP court filings.

"How is it credible for the prime minister to deny all knowledge, when every important person in his entourage was involved? Does he think people believe that in Brandon and Provencher?" asked Liberal deputy leader Ralph Goodale, referring to the location of two Manitoba byelections.

Harper responded by saying, "Mr. Wright has accepted full responsibility for his decision in these matters.

"The position of the government as I've said repeatedly is that we expect all parliamentarians to respect the rules regarding expenditure, not just the letter but the spirit of those rules, and if they don't respect those rules they will suffer the consequences and be held accountable."

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